Stocks plunged on Friday, hurt by a negative reaction to the latest round of tech earnings, with Amazon posting its biggest single-day loss in more than 15 years. The Nasdaq led the decline, falling 4.2% and recording its worst monthly performance since the Financial Crisis.
Even amid a wash of red for the overall markets, Accolade (ACCD) represented a standout decliner. The stock lost about half its value on earnings news.
A disappointing quarterly report also sparked selling in VeriSign (NASDAQ:VRSN). The stock posted a double-digit percentage decline and set a new low.
While most of Wall Street endured selling pressure, Chinese tech stocks bucked the overall trend. Signs of loosening regulatory restraints triggered gains in Alibaba (BABA), JD.com (JD), Baidu (BIDU), Pinduoduo (PDD) and Bilibili (BILI).
Zymeworks (ZYME) also escaped Wall Street’s downdraft, expanding its value by about a quarter in the wake of a takeover offer. Meanwhile, the release of strong financial figures allowed Carlisle Companies (CSL) to set a fresh intraday 52-week high, although the stock finished just below its previous closing peak.
Sector In Focus
Hope that China might ease its aggressive regulatory stance toward tech companies sparked a rally in the sector. An article published by the South China Morning Post reported that Beijing was poised to loosen its crackdown on internet companies in an attempt to support the economy.
On the news, Alibaba (BABA) and JD.com (JD) both surged by nearly 7%. Meanwhile, Baidu (BIDU) climbed about 3%.
Looking beyond the internet sector, other Chinese tech names also saw strength. Pinduoduo (PDD) was among the leaders in the group, jumping almost 14%. Bilibili (BILI) rose about 10%.
Zymeworks (ZYME) skyrocketed 23% following the announcement that the company has received a bid to be acquired.
The developer of antibody therapies for cancer said it has received the offer from All Blue Falcons, an investment firm based in Dubai. The purposed purchase price is $10.50 per share, equating to a total value of about $773M.
All Blue currently holds a 5.4% stake in ZYME.
Prompted by the bid, ZYME jumped $1.15 to close at $6.11, well below the $10.50 contemplated in the offer. Shares also sat well off the 52-week high of $39.41 established last year.
Accolade (ACCD) endured a massive investor exodus in the wake of its latest earnings report. A wider loss and a weak outlook prompted a nearly 50% slide in shares of the personalized healthcare provider.
ACCD said that its Q4 loss expanded dramatically from the previous year, as operating expenses more than doubled. This despite revenue that jumped 58% from last year.
The company also cut its full-year forecast, saying that a major customer would end its service relationship with the firm at the end of 2022. ACCD also blamed “the broader macro-environment” for “moderating our top-line growth objectives.”
ACCD cratered $5.50 to finish at $5.56. Shares also reached an intraday 52-week low of $4.61.
The plunge added to weakness seen in late 2021 and early 2022. The stock has fallen nearly 90% since setting a 52-week high of $55.47 in the middle of last year.
Notable New High
Carlisle Companies (CSL) surged to a new 52-week high, spurred higher by the release of Street-beating earnings news. The stock finished the session 4% higher.
The maker of building products easily topped analysts’ Q1 profit projection, exceeding their consensus by more than 70%. Revenue also surpassed the amount predicted by market experts, rising 46% from last year to a total of $1.5B.
Looking to Q2, the company’s CEO said CLS will likely “enjoy the benefits of an easing of our over two-year battle with the effects of the COVID-19 pandemic.”
Boosted by the earnings news, CSL surged to an intraday 52-week high of $271.49. Shares retreated from there but still ended the day at $259.36, a gain of $9.43.
While the stock reached a new intraday peak, it finished just below a closing high of $259.46 set on April 20.
Notable New Low
A disappointing profit figure triggered selling in VeriSign (VRSN). The stock plunged 14%, falling to a new 52-week low.
The provider of domain name registry services reported Q1 GAAP earnings that came in shy of analysts’ consensus. This came despite revenue that rose 7% from last year to reach almost $347M.
Meanwhile, the company reported that it processed 10.2M new domain name registrations for .com and .net. This was down from a total of 11.6M for the same period last year.
VRSN declined $29.73 to close at $178.69. During the session, the stock also reached an intraday 52-week low of $178.15.
With Friday’s retreat, the stock dropped below recent support to extend a decline seen in January, when VRSN came off a 52-week high of $257.03. The stock has lost about 30% of its value since that peak.
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